Payment Limitations Discussed In U.S. Senate

Sen. Tom Harkin (D-IA), chairman of the Senate Ag Committee, has proposed a limit of $250,000/farm household on commodity payments. Under the proposal, payment limitations would be restricted

P. Scott Shearer, Washington, D.C. correspondent | Sep 14, 2007

Sen. Tom Harkin (D-IA), chairman of the Senate Ag Committee, has proposed a limit of $250,000/farm household on commodity payments. Under the proposal, payment limitations would be restricted for a farm household to $50,000 in direct payments, $50,000 in countercyclical payments, and $150,000 in marketing loan gains. No household could receive more than $250,000 in total payments.

Under the proposal, a husband and wife will be considered as one individual, "unless prior to marriage each spouse was engaged in unrelated farming operations and after marriage the farming operations remain separate." Harkin proposes that a married couple filing a joint tax return showing an average adjusted gross income of $500,000 over the last three years, or a single person with a three-year adjusted gross income of $250,000, would not be eligible for commodity payments.

The House of Representatives-passed farm bill prohibits payments to individuals with more than $1 million in adjusted gross income.

Last month, Senators Byron Dorgan (D-ND) and Chuck Grassley (R-IA) sent a letter to members of the Senate urging them to support their payment limitations proposal. The Dorgan-Grassley proposal would limit annual per farm commodity subsidy payments to $250,000, end the "three-entity" rule, and ensure that payments actually go to engaged farmers.

In the letter, the Senators said, "The current payment limits promote farm consolidation, artificially increase land prices and create barriers for a new generation of farmers eager to enter the industry. By allowing this to continue, we are wasting taxpayer dollars, abusing the public's trust and undermining the very farm safety net our family farmers depend on to survive."